Areva and CEZ Sign 15-Year Temelin Nuclear Fuel Deal

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Researched by Industrial Info Resources (Sugar Land, Texas)--Areva has signed a significant 15-year uranium enrichment services contract for the Temelin nuclear power plant in the Czech Republic.

The contract relates to units 1 and 2 of the Temelin plant, owned by CEZ a.s. (Prague, Czech Republic). The agreement secures a long-term fuel supply for Temelin, which is in the process of tendering for two new reactors. The financial details of the deal were not disclosed.

The enrichment will take place at Areva SA's (EPA:CEI) new Georges Besse II enrichment plant in Tricastin, France, which is scheduled to start production by the end of this year. Georges Besse II is the first centrifuge-based enrichment plant in France, replacing an older and energy-intensive gaseous diffusion production plant. Costing an estimated 3 billion euros ($4.5 billion), the new modular facility is located at the Tricastin nuclear site, and final testing will be completed this month. Overall production will reach 7.5 million separative work units (SWU) per year in 2016, two years ahead of the initially forecast date.

"We consider the execution of the future enriched uranium product deliveries as a new challenge, which will require a very close cooperation with Areva," CEZ said in a statement. "This contract is a very important part of our long-term diversification of supply strategy."

François-Xavier Rouxel, executive president of Areva's Enrichment Business Unit, commented: "We are very pleased to renew our collaboration with a Central European utility. This success is a sign of the confidence placed by our Czech customer in Areva's know-how and reliability."

CEZ operates six nuclear reactors between the Dukovany and Temelin plants, which provide 31% of the Czech Republic's electricity generation. The company is currently in the market for two new 1,000-megawatt (MW) pressurized water reactors at units 3 and 4 of Temelin, Unit 5 of Dukovany and two reactors at Jaslovske Bohunice in Slovakia. Bids have been received from Atomstroyexport (Moscow, Russia); Areva; Westinghouse Electric Company LLC (Monroeville, Pennsylvania), owned by Toshiba Corporation (TYO:6502) (Tokyo, Japan); Mitsubishi Corporation (OTC:MSBHY); (Tokyo, Japan) and ATMEA (Paris), a joint venture between Areva and Mitsubishi Heavy Industries Limited (TYO:7011) (Tokyo). For additional information, see November 4, 2009, article - Czech Utility CEZ Receives Initial Bids in Response to Tender for Five New Nuclear Reactors.

CEZ said the process is at the economic evaluation stage, and a shortlist will be revealed next year before a final decision is announced in early 2011.

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